(Toronto, ON) Insurance brokers across Ontario, although not involved in setting auto insurance rates, are working hard to advocate for affordable coverage balanced with the benefits and protection consumers need.
On April 26th a study was updated and re-released by the Ontario Trial Lawyers Association (OTLA) on insurance company profitability and auto insurance rates.
Our comments remain consistent with those made when the original version was released in April, 2015 – we’re concerned about this misleading report, as it deceives Ontario consumers and provides inaccurate commentary on the state of the industry. Issuing misleading information does a disservice to the public and is not a proactive approach to positive change.
The insurance industry as a whole has been pointing out cost inefficiencies resulting from the current auto insurance structure for years. In an effort to resolve these issues, industry stakeholders including the Insurance Brokers Association of Ontario (IBAO) and leaders from across provincial legal institutions participated in a government released study by David Marshall, Ontario’s former adviser on auto insurance. The final report from this study recommended transformative steps to resolve the auto insurance structure in Ontario.
The following quotes are included in the Executive Summary of David Marshall’s report Fair Benefits, Fairly Delivered – A Review of the Auto Insurance System in Ontario:
“The structure is flawed: current trends do not indicate that the system will self-correct. Claim costs continue to rise while automobile accidents continue to fall. The main cause is not inefficiency or excess profits by insurance companies or the behaviour of claimants, providers or lawyers. It is the way the system is structured.”
“There is no magic bullet. To achieve lasting value for its citizens, the government must push beyond the old methods of tinkering with aspects of the system and make some of the structural changes to the delivery system as recommended in this report.”
Ontario brokers want lower rates for consumers. We believe there are two major solutions to bring down the cost of auto insurance in Ontario:
- Implementing the recommendations outlined in David Marshall’s report Fair Benefits, Fairly Delivered, released in April 2017.
- Transitioning from a system regulated by FSCO to the new regulator – the Financial Services Regulatory Authority (FSRA) – which will allow the industry to appropriately set and police major changes to insurance rate setting regulations and allow the regulator to bring heightened enforcement to auto insurance fraud.
We look forward to continuing our work with the Ontario government to inform responsible change for the benefit of consumers across Ontario.